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This paper investigates the importance of sunk costs, firm characteristics and spillovers from nearby exporters on a firm’s export participation decision. The empirical analysis involves the estimation of a non-structural, discrete choice, dynamic model with firm heterogeneity. The results suggest that both sunk costs and observable firm characteristics are important determinants of export market participation. In addition, previous history matters, in that, if a firm has been exporting the last period or the period before that it significantly increases the likelihood of the firm exporting in the current period. This conclusion is robust across all specifications. Also, larger firms with high capital intensity and foreign owned are more likely be exporters. Finally, while there is no clear evidence on export spillovers, if a firm operates in an export-oriented industry increases the likelihood of exporting. Dynamic Panel, sunk costs, export decision.

Using a sample of 603 subsidiaries Chinese Multinational Corporations (MNCs) and 174 subsidiaries Indian MNCs, we explore the regional and industrial pattern of their direct investment strategies. Our analysis reveals several important facts. First, most of outward foeign direct investment (FDI) is directed in finance and real estate and services. Second, by far the majority of investment projects are carried out in the home region of Asia-Pacific. Third, outward FDI is highly concentrated geographically and the average investment project is relatively small. Fourth, establishment of subsidiaries is the most preferred way of carrying out FDI. Finally, firm-specific and location-specific characteristics are important drivers of FDI strategies. Last but not least, a large proportion of Chinese and Indian investments is conducted mainly within those countries themselves, revealing a strong multi- domestic character. Outward Foreign Direct Investment, Chinese Multinational Corporations, Indian Multinational Corporations, Market Seeking, Resource Seeking, Efficiency Seeking, Risk Diversification

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The extensive empirical literature analyzing productivity spillovers from foreign direct investment to local firms provides inconclusive results. Some studies find that foreign presence has a positive impact on the productivity of domestic firms, while others find no evidence or a negative effect. Differences in the results may be attributable to contexts, such as the structural differences between developed, developing and transition economies. However, results may also vary due to different empirical methodologies, notably the use of aggregate versus firm-level data and cross-section versus panel data analysis. We conduct a meta-analysis to investigate reasons for these conflicting results, and provide a revised interpretation of earlier research and its policy implications, and new priorities for future research. Our analysis suggests that the hypothesized spillovers are not confirmed for industrialized countries in the 1990s. Transition economies may experience spillovers, but these have been declining in recent years.
Keywords: developing countries, transition economies, spillovers, foreign direct investment, technology transfer, meta-analysis